Big Data: Investments Flow into the Next Big Thing

Analysts seem to agree that the stars are aligning for Big Data.  Nearly every end-of-year list of predictions for the direction of IT in 2012 includes Big Data.

James Kobielus, Forrester analyst, wrote on his blog that “Big data was inescapable in 2011. Without a doubt, it was the paramount banner story in data management, advanced analytics, and business intelligence (BI). The hype has been relentless, but it’s been driven by substantial innovations on many fronts.”

In presentations both Gartner Vice President David Cearley and Gartner analyst David Cappucio identified Big Data as one of the top 10 strategic trends for IT in 2012.

Information Management magazine reports general agreement among analysts like Thomas Davenport.  The article reports that “Big data analytics will top all other areas of growth in analytics during 2012 due to the rapid expansion of social, mobile, location and transaction-based data taken in by various industries, according to predictions from the International Institute for Analytics.”

Ken Vander Wal, CISA, CPA, international president of ISACA said that “Big Data is going to evolve out of its ‘shiny new object’ status in 2012. IT leaders will need to figure out how to coax order out of the chaos from all those zeroes and ones, as well as optimize ROI and manage data privacy.”

Patti Prarie, CEO of Brighter Planet, wrote on the Huffington Post said that Big Data Analytics will be a hot trend in 2012, explaining that “As the volume of enterprise data sky-rockets, an industry is growing up around using this flood of information to help companies operate more efficiently and sustainably. Companies increasingly will be deploying sophisticated software as a key component of their sustainability strategy.”

Hot technologies attract money and interest from venture capitalists.  It’s no different now with what’s happening in the area of Big Data.

In December, in an article on IT investment areas for 2012, writer Clint Boulton identified Big Data as a “market too that is ripe for investment and acquisition.”

The New York Times reports Peter Goldmacher, an analyst and managing director at Cowen & Company as saying that “Venture capital is absolutely foaming at the mouth over big data.  The volume of data being created now is not 10 times bigger, it is like a thousand times bigger.”

Paul Sloan executive editor at C|Net writes that “Big data was a big term in 2011 and, as fuzzy as it sounds, it represents a monstrous opportunity for companies beyond the likes of Google, Facebook, Amazon, and LinkedIn. Anyone using an app-loaded smartphone is generating data that can be mined and made useful.”

Financial analysts identify IBM as a strong player because of their trove of Big Data technologies.  Online investment site seekingalpha writes that IBM “is at the center of the big data trend and is going to capitalize on the information revolution better than anyone…  Big data is a high margin business.”  IBM has a big stake in Big Data, but more likely, startups are where most of the new Big Data action will happen.

Accel Partners have set up a $100 million venture fund for investments called the Big Data fund.  The Wall Street Journal reports that the fund “will focus on infrastructure, storage, security and enterprise applications, all the way up to business intelligence, mobile apps, financial trading apps and more.”

Mu Sigma, foe example, an Indian big data, analytics and decision support services for global enterprise customers company, secured a $108 million investment round led by General Atlantic.

Other examples of startups starting to receive money include PlaceIQ and GridGain.

The Wall Street Journal reports that PlaceIQ, a stealthy geolocation and big data company that tracks where smartphone users are and what they might be doing, raised $4.2 million in venture funds.  In December, startup GridGain, a company specializing in high performance cloud computing and real time big data processing received a $2.5 million Series A round of financing led by RTP Ventures.